Partnership means association of two or more persons who can pool in required resources like capital, knowledge, expertise, skill, etc. in such a way, that together they can form a cohesive team leading their business towards achievement of their common goals successfully.
Features of partnership:
1.Liability: Partners are jointly as well as individually
liable for payment of debts and this liability is unlimited. When assets of the business are not sufficient to pay for its liabilities in full, personal assets of the partners can be used for making the payment.
2.Risk bearing : The risk involved in running the business is jointly borne by the partners.Both
profits and losses are shared by them in the pre agreed ratio.
3.Membership: Minimum two members are required to start a partnership business, while the maximum number of partners should not exceed twenty, in case of banking number of partners should be ten.
4. Number of Members
As we know that there should be a minimum of two members for a partnership. However, the maximum number will vary according to a few conditions. The Partnership Act itself is silent on this issue, but the Companies Act, 2013 provides clarity.
For a banking business, the number of partners must not exceed ten. For a business of any other nature, the maximum number is twenty. If the number of partners increases it will become an illegal entity or association.
